Further BoJ easing likely in October

Deteriorating growth and weakening inflation outlook in Japan increased the pressure for the BoJ to act early. Indeed, BoJ easing is expected in the 30 October 2015 meeting from the April 2016 meeting due to the downward revisions in corporate inflation expectations. While it is expected in end-October, there is also a risk of preemptive action as early as at this week's BoJ meeting.

According to Barclays, with regards to specific easing measures, the BoJ is expected to 

• Increase the annual pace of monetary base expansion to JPY100-110trn
  
  
• Increase JGB purchase to JPY100trn from JPY80trn, 
  
  
• Extend the average duration of JGB purchases to 9-12y from 7-10y, 
  
  
• Increase equity-linked ETF purchase to JPY6trn from JPY3trn, and 
  
  
• Cut IOER by 5bp to 0.05%.